Millions in incentives for downtown Oshawa hotel developers

Money would only be paid when hotel doors open

New Downtown Hotel

Ron Pietroniro / Metroland

OSHAWA-- Oshawa Mayor John Henry confirmed on Feb. 21 that a hotel is slated for downtown Oshawa. The Holiday Inn Express will be located at the corner of Simcoe Street North and Richmond Street East at what is now known as Queen's Market Square. The hotel's owners say they are hoping to begin construction this fall. February 21, 2013.

New Hotel

Supplied Photo

OSHAWA-- Oshawa Mayor John Henry confirmed on Feb. 21 that a hotel is slated for downtown Oshawa. The Holiday Inn Express will be located at the corner of Simcoe Street North and Richmond Street East at what is now known as Queen's Market Square. The hotel's owners say they are hoping to begin construction this fall. February 21, 2013.

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Downtown hotel history

Queen's Market Square

This is the second hotel proposal for Queen's Market Square in recent years. In 2008, the City entered into a conditional agreement with a developer to build a hotel and conference centre, but the subsequent economic downturn and other factors adversely impacting the developer meant the project never moved forward and the City retained the lands.

Genosha Hotel

Built in the late 1920s, Genosha was purchased in 2009 with plans to redevelop it, potentially as a residence for UOIT students. However those plans were scuttled in 2011 when the building was once again put up for sale.

Oshawa development services commissioner Tom Hodgins said there has been no change to the situation regarding the Genosha, which was Oshawa's first luxury hotel.

At his recent address to the Greater Oshawa Chamber of Commerce, Mayor John Henry reiterated that he didn't believe public money should be spent on purchasing the Genosha.

OSHAWA -- A new hotel for downtown Oshawa is one step closer after the City's development services committee approved a set of conditions for the construction of a Holiday Inn Express and conference centre, including a multi-million dollar incentive package.

The City has a purchase of sale agreement with Abdul Rehman for the development of a Holiday Inn hotel at Queen's Market Square, at the corner of Simcoe Street North and Richmond Street East. A municipal parking lot currently sits on the site.

In order for the sale to proceed, council has to approve a number of conditions including a preliminary site plan and building design, the provisions for parking in the area and financial incentives for the $21-million development.

Financial incentives for the project include a building permit grant which would see the City rebate roughly $90,000 upon completion of the hotel, a $124,000 facade improvement grant and $2 million in City taxes reimbursed to the developer over a period of 13 years.

None of these grants apply until the project is bu

The latter includes 100 per cent of City taxes reimbursed in years one to five of operation of the hotel and 99 per cent in years six to 13.

However, over a 20-year period, the City would collect about $1.5 million more in taxes if the project proceeds compared to the status quo.

"None of these grants apply until the project is built, that's important to remember on this," said Tom Hodgins, the City's commissioner of development services. "In no way is this a given before (Mr. Rehman) delivers or before he operates, so there's a lot of protection for the City."

Last week, Mr. Rehman said he did not ask for the grants.

"Those were there for me to grab them so we negotiated a good deal that works out for us and that works out for the City," he said.

According to economic impact studies on hotels examined by the City, it's anticipated that each hotel room will have a $50,000 annual impact on the local economy or $6 million per year.

Overall, Mr. Hodgins said the hotel would represent an important development for the north central part of the downtown.

"It's another vote of confidence for our downtown," he said.

The plans call for a six-storey, 125-room hotel building including a restaurant, swimming pool and fitness centre and a one-storey conference centre. A total of 155 parking spaces is proposed, with the majority underground.

A parking study showed that the 155 spots would be sufficient for regular demand, however it would not be enough when both the conference centre and hotel are operating at their peak. Those periods would only occur a few times a year, according to the City's staff report. On those days, on-street parking and parking garages in the downtown are expected to handle the overflow.

As well, Mr. Rehman has committed to providing paid parking to the public when the hotel and conference centre are not operating at peak occupancy.

A special council meeting will be held on Feb. 27 to approve the conditions on the project and if all goes according to schedule, the real estate transaction would close at the end of March.

City officials have declined to name a purchase price for the property until the deal is closed.

Reporter Reka Szekely covers the City of Oshawa for Metroland Media Group’s Durham Region Division. Reka's social media column appears every other week. Contact her on Facebook, Twitter (@rszekely)